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Target hangs up on more customers

Target hangs up on more customers

Target (TGT) is shutting down its wireless telecom service after offering it just two years, marking at least the second major business the retailer has exited in six months. Customers of Target’s Brightspot pre-paid wireless service are being notified the service will be terminated by the beginning of next year. Consumers won’t be able to activate new service after June 24.

The service’s doom ends what had been the mass merchant’s way to dive into the lucrative market for wireless access. Target joined forces with T-Mobile in late 2013 to launch the service as an answer Wal-Mart’s (WMT) successful Straight Talk wireless service. Brightspot and Straight Talk are examples of mobile virtual network operators (MVNOs) – where a third party sells wireless access to networks provided by telecoms like T-Mobile or AT&T. MVNOs are seen as becoming more popular as consumers look to ditch long-term contracts and buy phones outright or keep them longer instead of financing them with more expensive monthly contracts.

The closure of Target’s pre-paid wireless service marks the second business the company has shuttered over the past few months – following the wind down of its more than 100 stores in Canada – announced back in January. The company is looking to focus on core areas where it can reinvigorate growth. Revenue grew just 2.6% over the past 12 months, down from 4.9% growth in the year ended Feb. 2013.

Shares of Target are down 42 cents to $78.48 Tuesday. The stock is up 37% over the past year, topping the S&P 500’s 6.6% gain. The company did not return a request for comment on the closure. In a statement, T-Mobile said, “The evolution of the prepaid market has created new opportunities for T-Mobile and Target alike.”